Understanding capitalism’s hidden history from a Stalinist Soviet photo

Jaipur, Jan 22 (IANS) What does a Stalin-era photo of Lenin at a revolutionary gathering tell us about the evolution of the world’s developed economies?

It is that the developed economies do now require the developing economies to eschew the principles of protectionism and regulations and follow fully the principles of free market and trade, conveniently forgetting the role that these two factors had played in their own rise, said acclaimed South Korean development economist Ha-Joon Chang.

At a session titled “The Secret History of Capitalism” at the Jaipur Literature Festival’s third day on Saturday, he showed the original photo of Lenin flanked by Trotsky and Lev Kamenev and its Stalinist version where the latter two, who had been purged, have been air-brushed out.

Chang, who moderator Sanjeev Sanyal noted had “heretical views on economics”, began by telling how Britain had in the 18th century invented protectionism, not free trade which it later championed and how the US had followed its stead.

A reader in the Political Economy of Development at Cambridge and author of books like “Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism”, “23 Things They Don’t Tell You About Capitalism” and “Economics: The User’s Guide”, which focus on the double standards followed by the developed nations and international lending institutions and seek debunk received wisdom on economics, Chang said he had not obtained this information “by hacking the IMF” or “been told it by a old man in a remote Italian monastery” but relied it from open sources.

“But the problem is that economists now don’t know it and developed nations make excuses if you bring it up. It is like abolishing schools if some people don’t do too well in them,” he said, stressing the need for an change to a more equitable economic system in the world,

Chang observed that this needed strengthening of democracy, not necessarily the Western type, but one in which there is oversight, vigilance and checks and balances that crony-free systems come up.

Calling for an institutionalised mechanism for industry, he clarified that he was not calling for “compulsive Soviet planning” system but an open and transparent process, say a vision document, which can serve the needs of a country and its people, rather than a narrow section of the elite.